30th Sep 2005 07:03
Kiotech International plc30 September 2005 Press Release 30 September 2005 Kiotech International plc Interim Results Kiotech International plc, the provider of pheromone biotechnology for fishfarming, commercial and sports fishing, today announces its maiden interimresults for the six months ended 30 June 2005. Highlights• Raised £1.82 million, net of expenses, and moved from Ofex to AIM in June• Turnover remained steady at £104, 620, compared with £103,343 in the six months to end June 2004• Appointed Richard Rose, Chairman of Whittards of Chelsea, as a non-executive director in March Post period end• Signed exclusive worldwide distribution agreement for Ultrabite with Rapala VMC Corporation, the world-leading manufacturer and distributor of fishing lures and one of the largest distributors of premium fishing tackle• John Loftus has stepped down as CEO to join Rapala, in order to continue promoting Ultrabite• Peter Lawrence, Chairman of Lawrence plc, a specialist developer, manufacturer and distributor of pharmaceutical products for the animal health and farming markets, appointed as a non-executive director• Positive results achieved from a growth trial in juvenile Atlantic cod Commenting on the interim results, Nick Scott, Executive Chairman of Kiotech,said: "Kiotech is entering an exciting period in its development. The businesshas made good progress since its move to AIM in June this year, demonstratedboth by the agreement with Rapala for its sports fishing product and positivedata from trials to assess the efficacy of products that target the aquacultureand commercial fishing markets. We look forward to announcing further progressin the coming months." For further information, please contact: Kiotech www.kiotech.comNicholas Scott, Chairman Tel: +44 (0)20 7398 7700 Abchurch CommunicationsHeather Salmond/Charlie Jack Tel: +44 (0) 20 7398 [email protected] Chairman's Statement Introduction This has been an important period in the development of Kiotech. In June weleft Ofex after over seven years and moved to AIM, while at the same timeraising £1.82 million after expenses through the placing of 31,657,000 ordinaryshares at 7 pence each. The proceeds of the placing will be used to enable thecompany to continue its research and development programme and for generalworking capital needs. We believe that the Company's admission to AIM willbring significant benefits in raising our profile and status with investors,customers and suppliers. Results Trading in the six months to 30 June 2005 was broadly in line with expectations. Sales at £104,620 were slightly ahead of the same period last year but grossprofit increased significantly. Administration expenses rose in the period,even allowing for the one-off costs associated with admission to AIM, and wehave taken major steps, after the period end, to bring them more into line withthe activity level of the business. Operations Kiotech has developed innovative biotechnology, which we believe can contributeto the sustainability of the worldwide wild fish stocks. This will be achievedby reducing the reliance of aquaculture upon using wild fish as the primary feedfor farmed fish. Our focus is on exploiting the effects of our technology todevelop commercial applications within sports fishing, commercial fishing andaquaculture. I am pleased to announce that following lengthy negotiations we today signed twodistribution agreements with Rapala VMC Corporation. Kiotech has appointedRapala as its exclusive worldwide distributor for Ultrabite fish attractant tothe sports fishing market, and Rapala has also been appointed as a non-exclusivedistributor of Ultrabite for commercial fishing markets. Rapala's head officeis in Finland and it employs over 3,000 people worldwide. It is the leadingmanufacturer and distributor of fishing lures and one of the largestmanufacturers and distributors of sports fishing hooks and other sports fishingrelated products in the world. The negotiations with Rapala have resulted in a short-term fall in sales, whichwill impact full-year 2005 sales forecasts. The market has also been furtherweakened by extraordinary climactic conditions throughout mainland Europe.However, the Board is confident that the agreement with Rapala will produce amarked increase in sales, which is expected to become evident during 2006. Inaddition, we believe the recently signed agreement with Rapala will enable us tostreamline our operations and significantly lower our cost base. Independent trials have been completed to evaluate the efficacy of Kiotech'sbiotechnology within the cod, shrimp and tilapia segments of the industry underfull-scale commercial production conditions. Three month growth trials withjuvenile Atlantic cod were undertaken recently at a commercial on-growingfacility in Norway. At the end of the trial the cod exposed to our feedformulation showed a 10 per cent increase in growth over the control groups witha similar percentage reduction in feed quantity. As disclosed in the Company'sAIM admission document, Kiotech had agreed in principle arrangements withLawrence plc relating to field testing, pricing and marketing of commercialfishing and aquaculture products. Negotiations with Lawrence plc in this regardare expected to be concluded and announced within the next month. I am further delighted to report that the most important bass fishingcompetition in the world, which takes place in the USA, was won with a baitformulation incorporating Ultrabite. Management As announced today, John Loftus, Kiotech's Chief Executive is leaving theKiotech board and will be joining Rapala with responsibility for marketingUltrabite worldwide. I will assume the role of Chief Executive pending theappointment of a replacement. The Board would like to thank John for hisconsiderable contribution to the development of Kiotech and we look forward tocontinuing to work with him in his role at Rapala. The Board has been strengthened by the appointment of two non-executivedirectors during 2005. In March, we appointed Richard Rose, Chairman ofWhittards of Chelsea, and a previous recipient of the ''Entrepreneur of the yearAward'' at the PLC Awards 2003. This was followed in August by the appointmentof Peter Lawrence, Chairman of Lawrence plc, a specialist developer,manufacturer and distributor of pharmaceutical products for the animal healthand farming markets, who brings a wealth of industry knowledge that will helpKiotech position itself as a leader in the aquaculture market. Our newdirectors are already making a significant and useful contribution to thedeliberations of our board Outlook Kiotech is a young company developing and marketing an exciting technology. Therecent changes we have made to our distribution arrangements coupled with thesignificant reduction in our cost base, enable us to look forward with optimism. It is premature to say that we are well established on the road toprofitability but we have safely negotiated some significant obstacles and nowbelieve ourselves to be optimally structured to realise our potential. Nick ScottChairman INDEPENDENT REVIEW report to KIOTECH INTERNATIONAL PLC Introduction We have been instructed by the company to review the financial information forthe period ended 30 June 05 which comprises the consolidated profit and lossaccount, the consolidated balance sheet, the consolidated cash flow statementand the related notes 1 to 8. We have read the other information contained inthe interim report which comprises only the Chairman's Statement and consideredwhether it contains any apparent misstatements or material inconsistencies withthe financial information. Our responsibilities do not extend to any otherinformation. This report is made solely to the company's members, as a body, in accordancewith guidance contained in APB Bulletin 1999/4 "Review of Interim FinancialInformation". Our review work has been undertaken so that we might state to thecompany's members those matters we are required to state to them in a reviewreport and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the company and thecompany's members as a body, for our review work, for this report, or for theconclusion we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report in accordance with the AIMRules, which require that the accounting policies and presentation applied tothe interim figures should be consistent with those applied in preparing thepreceding annual accounts except where any changes, and the reasons for them,are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of Interim Financial Information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and, based thereon, assessing whetherthe accounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with UnitedKingdom auditing standards and therefore provides a lower level of assurancethan an audit. Accordingly, we do not express an audit opinion on the financialinformation. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period ended 30June 05. GRANT THORNTON UK LLPCHARTERED ACCOUNTANTS LONDON 30th September, 2005 KIOTECH INTERNATIONAL plc CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended JUNE 2005 Note 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Turnover 2 104,620 103,343 217,368 Cost of sales (62,331) (78,138) (148,840) Gross profit 42,289 25,205 68,528 Exceptional administrative expenses 3 (284,745) - -Administrative expenses (313,939) (129,779) (446,674) Administrative expenses - total (598,684) (129,779) (446,674) Operating loss (556,395) (104,574) (378,146) Net Interest 4,250 227 5,581 Loss on ordinary activities before taxation (552,145) (104,347) (372,565) Taxation - - 26,488 Loss on ordinary activities after taxation (552,145) (104,347) (346,077) Loss retained (552,145) (104,347) (346,077) Basic Loss per share 5 (1.58) (0.33) (1.07) KIOTECH INTERNATIONAL plc CONSOLIDATED BALANCE SHEET As at 30 JUNE 2005 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £Fixed assetsTangible assets 2,919 3,041 3,760Investments - 110 - 2,919 3,151 3,760 Current assetsStock 265,074 269,567 303,952Debtors 407,066 90,874 75,815Cash at bank and in hand 1,955,165 101,059 476,952 2,627,305 461,500 856,719 Creditors: amounts falling due within one year (414,296) (239,005) (241,967) Net current assets 2,213,009 222,495 614,752 Total assets less current liabilities 2,215,928 225,646 618,512 Creditors: amounts falling due after more than one - - -yearNet assets 2,215,928 225,646 618,512 Capital and reservesCalled up share capital 2,503,529 2,158,205 2,186,958Share premium account 6,808,642 4,517,309 5,010,652Other Reserves 147,500 - 112,500Profit and loss account (7,243,743) (6,449,868) (6,691,598)Equity shareholders' funds 2,215,928 225,646 618,512 KIOTECH INTERNATIONAL plc CASH FLOW STATEMENT For the six months ended 30 JUNE 2005 Note 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Net cash outflow from operating activities 7 (640,598) (330,228) (479,225) Returns on investments and servicing of financeInterest received 5,460 1,797 7,417Interest paid (1,210) (1,570) (1,836)Net cash inflow from returns on investments and servicing of finance 4,250 227 5,581 Capital expenditure and financial investmentPayments to acquire tangible fixed assets - (1,266) (3,826)Cash outflow before financing and management of liquid resources (636,348) (331,267) (477,470) FinancingIssue of shares 2,215,990 407,585 933,741Expenses paid in connection with share issues (101,429) (16,647) (20,707)Net cash outflow from financing 2,114,561 390,938 913,034 Increase in cash 8 1,478,213 59,671 435,564 KIOTECH INTERNATIONAL plc NOTES TO FINANCIAL STATEMENTS For the six months ended 30 JUNE 2005 1 Basis of Preparation The interim financial statements have been prepared in accordance withapplicable accounting standards and under the historical cost convention. Theprincipal accounting policies of the Group have remained unchanged from thoseset out in the Group's 31 December 2004 annual report and financial statements.The interim financial statements have been reviewed by the Group's auditors. Acopy of the auditors' review report is attached to this interim report. 2 Segmental information Turnover is attributable to the principal activity of the Group. Turnover by geographical segment, by destination, was as follows: 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Europe 45,337 70,216 46,456Rest of World 59,283 33,127 170,912 104,620 103,343 217,368 3 Exceptional Adminstrative Expenses 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ AIM Flotation Costs 284,745 - - 4 DIVIDENDS No dividends have been paid or proposed for the period. 5 EARNINGS PER SHARE 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Loss for the financial period (552,145) (104,347) (346,077) Weighted average number of shares Number Number Number of shares of shares of shares For basic earnings per share 34,938,163 31,491,406 32,230,037 The calculation of the basic loss per share is based on the loss for the perioddivided by the weighted average number of shares in issue during the period.Share options outstanding at the period end were anti-dilutive. 6 PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefigures for the year ended 31 December 2004 have been calculated from thestatutory financial statements which have been filed with the Registrar ofCompanies. The auditors' report on those financial statements was unqualifiedand did not contain a statement under Section 237(2) of the Companies Act 1985. 7 Net cash outflow from operating activities 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Operating loss (556,395) (104,574) (378,146)Depreciation 841 2,575 4,416Loss on fixed asset investment - - 110Issue of share options 35,000 - 112,500Decrease in stocks 38,878 48,413 14,028(Increase)/decrease in debtors (331,251) (16,227) 25,320Increase/(decrease) in creditors 172,329 (260,415) (257,453)Net cash outflow from operating activities (640,598) (330,228) (479,225) 8 Reconciliation of net cash flow to movement in net FUNDS 6 months ended 6 months ended Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £ £ £ Increase in cash in the period 1,478,213 59,671 435,564 Movement in net funds in the year 1,478,213 59,671 435,564Net funds at the beginning of the period 476,952 41,388 41,388Net funds at the end of the period 1,955,165 101,059 476,952 9 Analysis of changes in net Funds At 1 January 2005 Cashflow At 30 June 2005 (Unaudited) (Unaudited) (Unaudited) £ £ £ Cash at bank and in hand 476,952 1,478,213 1,955,165 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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